Record Q4 Income from Continuing Operations of $1.00 Per Diluted
Share COLUMBUS, Ohio, March 4 /PRNewswire-FirstCall/ -- Big Lots,
Inc. (NYSE: BIG) today reported net income of $78.8 million, or
$0.96 per diluted share, for fourth quarter of fiscal 2008. This
compares to net income of $92.0 million, or $1.04 per diluted share
for the fourth quarter of fiscal 2007. For fiscal year 2008 ended
January 31, 2009, net income was $151.5 million, or $1.85 per
diluted share, compared to net income of $158.5 million, or $1.55
per diluted share, for fiscal 2007. Results include both the
continuing operations of the business and discontinued operations.
Discontinued operations, which are discussed later in this release,
for the fourth quarter and fiscal year 2008 totaled a loss of $3.0
million and a loss of $3.3 million, respectively, compared to
income from discontinued operations of $6.4 million and $7.3
million for the fourth quarter and full year of fiscal 2007,
respectively. (Logo:
http://www.newscom.com/cgi-bin/prnh/20011026/BIGLOTSLOGO )
Continuing Operations For the fourth quarter of fiscal 2008, income
from continuing operations was $81.8 million, or $1.00 per diluted
share, compared to income from continuing operations of $85.6
million, or $0.97 per diluted share, for the same period of fiscal
2007. For fiscal 2008, income from continuing operations was $154.8
million, or $1.89 per diluted share, compared to income from
continuing operations of $151.2 million, or $1.47 per diluted
share, for fiscal 2007. As a reminder, for the fourth quarter and
fiscal 2007, results from continuing operations include items that
we believe are not directly related to our ongoing operations.
Therefore, we have provided supplemental non-GAAP fiscal 2007
fourth quarter and full year results and the complementary
schedules entitled "Unaudited Adjusted Results and Reconciliation"
that exclude these items. We believe that these non-GAAP financial
measures should facilitate analysis by investors and others who
follow our financial performance. In the supplemental non-GAAP
disclosures, the items excluded from continuing operations
represent net income of $3.1 million, or $0.04 per diluted share,
for the fourth quarter of fiscal 2007, and $6.1 million, or $0.06
per diluted share, for fiscal 2007. The items are comprised of: (1)
net income of $3.1 million recognized in the fourth quarter of
fiscal 2007 related to the bankruptcy trust settlement of the 2004
KB Toys bankruptcy and (2) net income of $3.0 million recognized
during fiscal 2007 related to insurance proceeds recovered from
claims filed as a result of hurricanes occurring during fiscal
2005. Excluding the 2004 bankruptcy trust settlement of KB Toys,
the fourth quarter fiscal 2007 income from continuing operations
was $82.5 million, or $0.93 per diluted share. Excluding the 2004
bankruptcy trust settlement of KB Toys and insurance proceeds
recovered from the hurricane-related claims filed during fiscal
2005, the fiscal 2007 income from continuing operations was $145.1
million, or $1.41 per diluted share. FISCAL 2008 HIGHLIGHTS --
Record income from continuing operations of $155 million -- Record
income from continuing operations of $1.89 per diluted share versus
income from continuing operations (on a non-GAAP basis) of $1.41
per diluted share last year -- Record operating profit dollars of
$255 million -- Cash Flow (defined as operating activities less
investing activities) of $123 million -- Record inventory turnover
of 3.6 Commenting on fiscal year 2008 results, Steve Fishman,
Chairman and Chief Executive Officer stated, "Amidst a very
challenging economic climate, we stayed focused on our strategy and
what was within our control. We offered our customers better
quality merchandise, new brands, and tremendous value at a time
when they needed it the most. Our merchants managed inventories
tightly and generated record inventory turnover. We controlled
costs very diligently and recorded the lowest expense rate in the
Company's history while investing for the future in IT systems and
opening 21 new stores. Bottom line: 2008 was a record year for EPS
and income from continuing operations." FOURTH QUARTER HIGHLIGHTS
-- Record income from continuing operations of $1.00 per diluted
share versus income from continuing operations (on a non-GAAP
basis) of $0.93 per diluted share last year -- Operating profit
rate expansion of 30 basis points to 9.7% from 9.4% last year (on a
non-GAAP basis) Fourth Quarter Results Net sales for the fourth
quarter of fiscal 2008 were $1,366.9 million, compared to $1,412.4
million for the fourth quarter of fiscal 2007. Comparable store
sales for stores open at least two years at the beginning of the
fiscal year decreased 3.2% for the quarter. Our operating profit
rate for the fourth quarter of fiscal 2008 was 9.7% of sales
compared to last year's operating profit rate of 9.4% of sales. The
improvement in operating profit rate resulted from gross margin
rate improvement, partially offset by slight expense de-leverage
for the quarter. Our gross margin rate increased 70 basis points
compared to last year due to higher initial markup and lower
freight expenses. This favorability was only partially offset by
the merchandise mix pressure created by the sales out-performance
of certain lower margin categories. As expected, expenses as a
percent of sales increased slightly due to the de-leveraging impact
of a comp store sales decline partially offset by efficiencies in
supply chain and stores, and lower depreciation compared to the
prior year. For the fourth quarter of fiscal 2008, we recorded net
interest expense of $1.1 million compared to net interest expense
of $2.0 million last year and the income tax rate for the fourth
quarter of fiscal 2008 was 38.1% compared to 36.8% last year.
Inventory and Cash Management Inventory ended the fourth quarter at
$737 million, down 2% or $11 million compared to last year. Lower
inventory value resulted from a decline in store count as average
store inventory levels were relatively flat compared to the prior
year. For fiscal 2008, we achieved record inventory turnover
results driven by improving inventory management, timely flow of
merchandise, and continually taking markdowns to generate
sell-through of merchandise. Inventory turnover performance
combined with improving operating results yielded Cash Flow for
fiscal 2008 of $123 million. We ended the fourth quarter of fiscal
2008 with $62 million in debt, or $102 million lower than last
year. Discontinued Operations As discussed in our Form 10-K filed
with the SEC on April 1, 2008, we classify as discontinued
operations the operating results and costs associated with 130
stores closed in fiscal 2005 and activity related to KB Toys. For
the fourth quarter and fiscal 2008, we recorded a loss from
discontinued operations of $3.0 million and $3.3 million,
respectively. For the fourth quarter and fiscal 2007, we recorded
income from discontinued operations of $6.4 million and $7.3
million, respectively. We sold KB Toys in December 2000, but we
have continuing indemnification and guarantee obligations with
respect to certain KB Toys store leases. KB Toys filed for
bankruptcy protection in 2004, emerged from bankruptcy in 2005, and
again filed for bankruptcy protection in December 2008 with the
stated intention of liquidating its stores. In connection with KB
Toys' latest bankruptcy filing, we believe we may have an
indemnification or guarantee obligation with respect to 31 rejected
store leases. As a result, we recorded a $3.0 million loss from
discontinued operations for the fourth quarter of fiscal 2008.
Income from discontinued operations for the fourth quarter of
fiscal 2007 was principally comprised of $5.3 million related to
the release of a portion of our reserves relating to KB Toys' 2004
bankruptcy and $1.1 million related to the receipt of a bankruptcy
trust settlement related to KB Toys' 2004 bankruptcy, partially
offset by $0.1 million of expense related to the 130 stores we
closed in fiscal 2005. 2009 OUTLOOK -- Initial Fiscal 2009 annual
guidance for income from continuing operations of $1.75 to $1.90
per diluted share versus income from continuing operations of $1.89
per diluted share in Fiscal 2008 -- Comparable store sales expected
to be in a range of Flat to a 2% decrease -- Initial annual Cash
Flow guidance of approximately $145 million -- Initial Q1 2009
guidance for income from continuing operations of $0.34 to $0.40
per diluted share versus income from continuing operations of $0.42
per diluted share in Q1 2008 Commenting on the outlook, Mr. Fishman
stated, "We have built a foundation and business model that has a
very low comp leverage point, generates significant amounts of
cash, and provides our customers with quality merchandise at a
great value. Our team firmly believes that the repositioning
efforts of the last three years have left us in the enviable
position of taking advantage of deals, both merchandise and real
estate, and being able to withstand what is shaping up to be a very
challenging economic backdrop for fiscal 2009. We will continue to
invest in IT systems and real estate, both new and existing stores,
with an eye on the longer-term to ensure we are well-positioned to
benefit when the economy and overall retail environment improves."
We estimate fiscal 2009 income from continuing operations will be
in the range of $1.75 to $1.90 per diluted share compared to income
from continuing operations of $1.89 per diluted share for fiscal
2008. This guidance for EPS is based on comparable store sales in
the range of flat to down 2%. We estimate that the operating profit
rate will be in a range of 5.2% to 5.5% of sales. The gross margin
rate for fiscal 2009 is expected to be similar to fiscal 2008 and
we are estimating that flat comparable store sales are needed to
leverage the expense structure of the business. We estimate net
interest expense of approximately $2 million and an income tax rate
in the range of 38.0% to 39.0% for fiscal 2009. Capital
expenditures are expected to be approximately $80 to $85 million
with depreciation expense estimated to be in the range of $70 to
$75 million. We estimate this financial performance should result
in Cash Flow of approximately $145 million. The average diluted
share count is estimated to be in the range of 82 to 83 million for
fiscal 2009. For the first quarter of fiscal 2009, we estimate a
comparable store sales decrease of 1% to 3% which is consistent
with quarter to date trends experienced through yesterday, March
3rd. Based on this level of sales performance, our income from
continuing operations is estimated to be in the range of $0.34 to
$0.40 per diluted share, compared to income from continuing
operations $0.42 per diluted share for the first quarter of fiscal
2008. Conference Call/Webcast We will host a conference call today
at 8:00 a.m. Eastern Time to discuss our fourth quarter and fiscal
2008 financial results, and provide commentary on our fiscal 2009
financial guidance. We invite you to listen to the webcast of the
conference call through the Investor Relations section of our
website (http://www.biglots.com/). If you are unable to join the
live webcast, an archive of the call will be available through the
Investor Relations section of our website (http://www.biglots.com/)
beginning two hours after the call ends and will remain available
through midnight on Wednesday, March 18. A replay of the call will
also be available beginning March 4 at 12:00 noon Eastern Time
through March 18 at midnight by dialing: 1.800.207.7077 (United
States and Canada) or 1.913.383.5767 (International or
metro-Seattle). The PIN is 6852. Big Lots is the nation's largest
broadline closeout retailer. As of the end of the fourth quarter of
fiscal 2008 (January 31, 2009), we operated 1,339 BIG LOTS stores
in 47 states. We also sell merchandise via the internet at
http://www.biglots.com/. Wholesale operations are conducted through
BIG LOTS WHOLESALE, CONSOLIDATED INTERNATIONAL, and WISCONSIN TOY
and with online sales at http://www.biglotswholesale.com/.
Cautionary Statement Concerning Forward-Looking Statements Certain
statements in this release are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, and such statements are intended to qualify for the
protection of the safe harbor provided by the Act. The words
"anticipate," "estimate," "expect," "objective," "goal," "project,"
"intend," "plan," "believe," "will," "should," "may," "target,"
"forecast," "guidance," "outlook" and similar expressions generally
identify forward-looking statements. Similarly, descriptions of our
objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of management as to future occurrences and trends,
including statements expressing optimism or pessimism about future
operating results or events and projected sales, earnings, capital
expenditures and business strategy. Forward-looking statements are
based upon a number of assumptions concerning future conditions
that may ultimately prove to be inaccurate. Forward-looking
statements are and will be based upon management's then-current
views and assumptions regarding future events and operating
performance, and are applicable only as of the dates of such
statements. Although we believe the expectations expressed in
forward-looking statements are based on reasonable assumptions
within the bounds of our knowledge, forward-looking statements, by
their nature, involve risks, uncertainties and other factors, any
one or a combination of which could materially affect our business,
financial condition, results of operations or liquidity.
Forward-looking statements that we make herein and in other reports
and releases are not guarantees of future performance and actual
results may differ materially from those discussed in such
forward-looking statements as a result of various factors,
including, but not limited to, the current economic and credit
crisis, the cost of goods, our inability to successfully execute
strategic initiatives, competitive pressures, economic pressures on
our customers and us, the availability of brand name closeout
merchandise, trade restrictions, freight costs, the risks discussed
in the Risk Factors section of our most recent Annual Report on
Form 10-K, and other factors discussed from time to time in our
other filings with the SEC, including Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. This release should be read
in conjunction with such filings, and you should consider all of
these risks, uncertainties and other factors carefully in
evaluating forward-looking statements. You are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date thereof. We undertake no obligation to publicly
update forward-looking statements, whether as a result of new
information, future events or otherwise. You are advised, however,
to consult any further disclosures we make on related subjects in
our public announcements and SEC filings. BIG LOTS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
JANUARY 31, FEBRUARY 2, 2009 2008 ---------- ---------- (Unaudited)
ASSETS Current assets: Cash and cash equivalents $34,773 $37,131
Inventories 736,616 747,942 Deferred income taxes 45,275 53,178
Other current assets 54,207 52,859 ------ ------ Total current
assets 870,871 891,110 ------- ------- Property and equipment - net
490,041 481,366 Deferred income taxes 53,763 51,524 Other assets
17,783 19,815 ---------- ---------- $1,432,458 $1,443,815
========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Current maturities under bank credit facilities
$61,700 $0 Accounts payable 235,973 260,272 Property, payroll and
other taxes 66,525 65,260 Accrued operating and other current
liabilities 45,693 62,978 Insurance reserves 38,303 37,762 KB
bankruptcy lease obligation 5,043 0 Accrued salaries and wages
40,460 37,531 Income taxes payable 21,398 36,541 ------ ------
Total current liabilities 515,095 500,344 ------- ------- Long-term
bank debt 0 163,700 Deferred rent 29,192 35,955 Insurance reserves
45,197 45,092 Unrecognized tax benefits 28,852 25,353 Other
liabilities 39,277 34,885 Shareholders' equity 774,845 638,486
------- ------- $1,432,458 $1,443,815 ========== ========== BIG
LOTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data) 13 WEEKS ENDED 13
WEEKS ENDED ---------------- ---------------- JANUARY 31, 2009
FEBRUARY 2, 2008 % % ---------------- ---------------- (Unaudited)
(Unaudited) Net sales $1,366,925 100.0 $1,412,374 100.0 ----------
----- ---------- ----- Gross margin 552,572 40.4 560,550 39.7
Selling and administrative expenses 399,636 29.2 399,064 28.3
Depreciation expense 19,756 1.4 23,624 1.7 ------ --- ------ ---
Operating profit 133,180 9.7 137,862 9.8 Interest expense (1,129)
(0.1) (2,081) (0.1) Interest and investment income 29 0.0 56 0.0 --
--- -- --- Income from continuing operations before income taxes
132,080 9.7 135,837 9.6 Income tax expense 50,273 3.7 50,189 3.6
------ --- ------ --- Income from continuing operations 81,807 6.0
85,648 6.1 Income (loss) from discontinued operations, net of tax
(benefit) expense of ($1,993) and $4,145, respectively (3,042)
(0.2) 6,367 0.5 ------ ---- ----- --- Net income $78,765 5.8
$92,015 6.5 ======= === ======= === Earnings per common share -
basic (a) Continuing operations $1.01 $0.97 Discontinued operations
(0.04) 0.07 ----- ----- Net income $0.97 $1.05 ===== ===== Earnings
per common share - diluted (a) Continuing operations $1.00 $0.97
Discontinued operations (0.04) 0.07 ----- ----- Net income $0.96
$1.04 ===== ===== Weighted average common shares outstanding Basic
81,314 87,974 Dilutive effect of share-based awards 689 507 ------
--- Diluted 82,003 88,481 ====== ====== (a) The earnings per share
for Continuing Operations, Discontinued Operations and Net Income
are separately calculated in accordance with SFAS No. 128;
therefore, the sum of earnings per share for Continuing Operations
and Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. UNAUDITED ADJUSTED
RESULTS Schedule Provided for Informational Purposes Only BIG LOTS,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS EXCLUDING FISCAL 2007 KB BANKRUPTCY PROCEEDS (In
thousands, except per share data) 13 WEEKS ENDED 13 WEEKS ENDED
---------------- ---------------- JANUARY 31, 2009 FEBRUARY 2, 2008
% % ---------------- ---------------- (Unaudited) (Unaudited)
Adjusted Results Excluding KB Bankruptcy As Reported Proceeds
(non-GAAP) Net sales $1,366,925 100.0 $1,412,374 100.0 ----------
----- ---------- ----- Gross margin 552,572 40.4 560,550 39.7
Selling and administrative expenses 399,636 29.2 404,236 28.6
Depreciation expense 19,756 1.4 23,624 1.7 ------ --- ------ ---
Operating profit 133,180 9.7 132,690 9.4 Interest expense (1,129)
(0.1) (2,081) (0.1) Interest and investment income 29 0.0 56 0.0 --
--- -- --- Income from continuing operations before income taxes
132,080 9.7 130,665 9.3 Income tax expense 50,273 3.7 48,144 3.4
------ --- ------ --- Income from continuing operations 81,807 6.0
82,521 5.8 Income (loss) from discontinued operations, net of tax
(benefit) expense of ($1,993) and $4,145, respectively (3,042)
(0.2) 6,367 0.5 ------ ---- ----- --- Net income $78,765 5.8
$88,888 6.3 ======= === ======= === Earnings per common share -
basic (a) Continuing operations $1.01 $0.94 Discontinued operations
(0.04) 0.07 ----- ----- Net income $0.97 $1.01 ===== ===== Earnings
per common share - diluted (a) Continuing operations $1.00 $0.93
Discontinued operations (0.04) 0.07 ----- ----- Net income $0.96
$1.00 ===== ===== Weighted average common shares outstanding Basic
81,314 87,974 Dilutive effect of share-based awards 689 507 ------
------ Diluted 82,003 88,481 ====== ====== (a) The earning per
share for Continuing Operations, Discontinued Operations, and Net
Income are separately calculated in accordance with SFAS No. 128;
therefore, the sum of earnings per share for Continuing Operations
and Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. UNAUDITED ADJUSTED
RESULTS AND RECONCILIATION Schedule Provided for Informational
Purposes Only BIG LOTS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS EXCLUDING FISCAL 2007 KB
BANKRUPTCY PROCEEDS (In thousands, except per share data) 13 WEEKS
ENDED 13 WEEKS ENDED ----------------
----------------------------------- JANUARY 31, 2009 FEBRUARY 2,
2008 ---------------- -----------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) Adjusted Results
Excluding KB KB As As Bankruptcy Bankruptcy Reported Reported
Proceeds (a) Proceeds (non-GAAP) Net sales $1,366,925 $1,412,374
$1,412,374 ---------- ---------- ---------- ---------- Gross margin
552,572 560,550 560,550 Selling and administrative expenses 399,636
399,064 5,172 404,236 Depreciation expense 19,756 23,624 23,624
---------- ---------- ---------- ---------- Operating profit
133,180 137,862 (5,172) 132,690 Interest expense (1,129) (2,081)
(2,081) Interest and investment income 29 56 56 ----------
---------- ---------- ---------- Income from continuing operations
before income taxes 132,080 135,837 (5,172) 130,665 Income tax
expense 50,273 50,189 (2,045) 48,144 ---------- ----------
---------- ---------- Income from continuing operations 81,807
85,648 (3,127) 82,521 Income (loss) from discontinued operations,
net of tax (benefit) expense of ($1,993) and $4,145, respectively
(3,042) 6,367 6,367 ---------- ---------- ---------- ---------- Net
income $78,765 $92,015 ($3,127) $88,888 ========== ==========
========== ========== Earnings per common share -basic (b)
Continuing operations $1.01 $0.97 ($0.04) $0.94 Discontinued
operations (0.04) 0.07 0.00 0.07 ---------- ---------- ----------
---------- Net income $0.97 $1.05 ($0.04) $1.01 ==========
========== ========== ========== Earnings per common share -diluted
(b) Continuing operations $1.00 $0.97 ($0.04) $0.93 Discontinued
operations (0.04) 0.07 0.00 0.07 ---------- ---------- ----------
---------- Net income $0.96 $1.04 ($0.04) $1.00 ==========
========== ========== ========== Weighted average common shares
outstanding Basic 81,314 87,974 87,974 87,974 Dilutive effect of
share-based awards 689 507 507 507 ---------- ---------- ----------
---------- Diluted 82,003 88,481 88,481 88,481 ==========
========== ========== ========== (a) The $5,172 reflected above is
proceeds from the KB Toys bankruptcy trust recognized as a
reduction of cost in selling and administrative expenses for our
partial recovery of prior charges incurred against the Havens
Corners Corporation Note ("HCC Note"). We sold the KB toy business
in December 2000. As partial consideration for the sale of the KB
toy business, we received the HCC Note. In January 2004, KB Toys
filed for bankruptcy and in separate charges included in selling
and administrative expenses in fiscal 2003 and 2005, we reduced our
balance receivable on the HCC note. (b) The earnings per share for
Continuing Operations, Discontinued Operations and Net Income are
separately calculated in accordance with SFAS No. 128; therefore,
the sum of earnings per share for Continuing Operations and
Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. BIG LOTS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands, except per share data) 52 WEEKS ENDED 52 WEEKS ENDED
---------------- ---------------- JANUARY 31, 2009 FEBRUARY 2, 2008
% % ---------------- ---------------- (Unaudited) Net sales
$4,645,283 100.0 $4,656,302 100.0 ---------- ----- ---------- -----
Gross margin 1,857,429 40.0 1,840,343 39.5 Selling and
administrative expenses 1,523,882 32.8 1,515,379 32.5 Depreciation
expense 78,624 1.7 88,484 1.9 ------ --- ------ --- Operating
profit 254,923 5.5 236,480 5.1 Interest expense (5,282) (0.1)
(2,513) (0.1) Interest and investment income 65 0.0 5,236 0.1 --
--- ----- --- Income from continuing operations before income taxes
249,706 5.4 239,203 5.1 Income tax expense 94,908 2.0 88,023 1.9
------ --- ------ --- Income from continuing operations 154,798 3.3
151,180 3.2 Income (loss) from discontinued operations, net of tax
(benefit) expense of ($2,116) and $4,726, respectively (3,251)
(0.1) 7,281 0.2 ------ ---- ----- --- Net income $151,547 3.3
$158,461 3.4 ======== === ======== === Earnings per common share -
basic (a) Continuing operations $1.91 $1.49 Discontinued operations
(0.04) 0.07 ----- ----- Net income $1.87 $1.56 ===== ===== Earnings
per common share - diluted (a) Continuing operations $1.89 $1.47
Discontinued operations (0.04) 0.07 ----- ----- Net income $1.85
$1.55 ===== ===== Weighted average common shares outstanding Basic
81,111 101,393 Dilutive effect of share-based awards 965 1,149
------ ----- Diluted 82,076 102,542 ====== ======= (a) The earnings
per share for Continuing Operations, Discontinued Operations and
Net Income are separately calculated in accordance with SFAS No.
128; therefore, the sum of earnings per share for Continuing
Operations and Discontinued Operations may differ, due to rounding,
from the calculated earnings per share of Net Income. UNAUDITED
ADJUSTED RESULTS Schedule Provided for Informational Purposes Only
BIG LOTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS EXCLUDING FISCAL 2007 KB BANKRUPTCY AND INSURANCE
PROCEEDS (In thousands, except per share data) 52 WEEKS ENDED 52
WEEKS ENDED ---------------- ---------------- JANUARY 31, 2009
FEBRUARY 2, 2008 % % ---------------- ---------------- (Unaudited)
(Unaudited) Adjusted Results Excluding KB Bankruptcy and Insurance
As Reported Proceeds (non-GAAP) Net sales $4,645,283 100.0
$4,656,302 100.0 ---------- ----- ---------- ----- Gross margin
1,857,429 40.0 1,840,343 39.5 Selling and administrative expenses
1,523,882 32.8 1,525,471 32.8 Depreciation expense 78,624 1.7
88,484 1.9 ------ --- ------ --- Operating profit 254,923 5.5
226,388 4.9 Interest expense (5,282) (0.1) (2,513) (0.1) Interest
and investment income 65 0.0 5,236 0.1 -- --- ----- --- Income from
continuing operations before income taxes 249,706 5.4 229,111 4.9
Income tax expense 94,908 2.0 84,032 1.8 ------ --- ------ ---
Income from continuing operations 154,798 3.3 145,079 3.1 Income
(loss) from discontinued operations, net of tax (benefit) expense
of ($2,116) and $4,726, respectively (3,251) (0.1) 7,281 0.2 ------
---- ----- --- Net income $151,547 3.3 $152,360 3.3 ======== ===
======== === Earnings per common share - basic (a) Continuing
operations $1.91 $1.43 Discontinued operations (0.04) 0.07 -----
----- Net income $1.87 $1.50 ===== ===== Earnings per common share
- diluted (a) Continuing operations $1.89 $1.41 Discontinued
operations (0.04) 0.07 ----- ----- Net income $1.85 $1.49 =====
===== Weighted average common shares outstanding Basic 81,111
101,393 Dilutive effect of share-based awards 965 1,149 ------
------- Diluted 82,076 102,542 ====== ======= (a) The earning per
share for Continuing Operations, Discontinued Operations, and Net
Income are separately calculated in accordance with SFAS No. 128;
therefore, the sum of earnings per share for Continuing Operations
and Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. UNAUDITED ADJUSTED
RESULTS AND RECONCILIATION Schedule Provided for Informational
Purposes Only BIG LOTS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS EXCLUDING FISCAL 2007 KB
BANKRUPTCY AND INSURANCE PROCEEDS (In thousands, except per share
data) 52 WEEKS ENDED 52 WEEKS ENDED ----------------
----------------------------------------- JANUARY 31, 2009 FEBRUARY
2, 2008 ---------------- -----------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) Adjusted Results
Excluding KB KB Bankruptcy Bankruptcy Insurance and As As Proceeds
Proceeds Insurance Reported Reported (a) (b) Proceeds (non-GAAP)
Net sales $4,645,283 $4,656,302 $4,656,302 ---------- ----------
------- ------- ---------- Gross margin 1,857,429 1,840,343
1,840,343 Selling and administrative expenses 1,523,882 1,515,379
5,172 4,920 1,525,471 Depreciation expense 78,624 88,484 88,484
---------- ---------- ------- ------- ---------- Operating profit
254,923 236,480 (5,172) (4,920) 226,388 Interest expense (5,282)
(2,513) (2,513) Interest and Investment income 65 5,236 5,236
---------- ---------- ------- ------- ---------- Income from
continuing operations before income taxes 249,706 239,203 (5,172)
(4,920) 229,111 Income tax expense 94,908 88,023 (2,045) (1,946)
84,032 ---------- ---------- ------- ------- ---------- Income from
continuing operations 154,798 151,180 (3,127) (2,974) 145,079
Income (loss) from discontinued operations, net of tax (benefit)
expense of ($2,116) and $4,726, Respectively (3,251) 7,281 7,281
---------- ---------- ------- ------- ---------- Net income
$151,547 $158,461 ($3,127) ($2,974) $152,360 ========== ==========
======= ======= ========== Earnings per common share -basic (c)
Continuing operations $1.91 $1.49 ($0.03) ($0.03) $1.43
Discontinued operations (0.04) 0.07 0.00 0.00 0.07 ----------
---------- ------- ------- ---------- Net income $1.87 $1.56
($0.03) ($0.03) $1.50 ========== ========== ======= =======
========== Earnings per common share-diluted (c) Continuing
operations $1.89 $1.47 ($0.03) ($0.03) $1.41 Discontinued
operations (0.04) 0.07 0.00 0.00 0.07 ---------- ---------- -------
------- ---------- Net income $1.85 $1.55 ($0.03) ($0.03) $1.49
========== ========== ======= ======= ========== Weighted average
common shares outstanding Basic 81,111 101,393 101,393 101,393
101,393 Dilutive effect of share-based awards 965 1,149 1,149 1,149
1,149 ---------- ---------- ------- ------- ---------- Diluted
82,076 102,542 102,542 102,542 102,542 ========== ==========
======= ======= ========== (a) The $5,172 reflected above is
proceeds from the KB Toys bankruptcy trust recognized as a
reduction of cost in selling and administrative expenses for our
partial recovery of prior charges incurred against the Havens
Corners Corporation Note ("HCC Note"). We sold the KB toy business
in December 2000. As partial consideration of the sale of the KB
toy business, we received the HCC Note. In January 2004, KB Toys
filed for bankruptcy and in separate charges included in selling
and administrative expenses in fiscal 2003 and 2005, we reduced our
balance receivable on the HCC note. (b) During fiscal 2007, we
received $4,920 of insurance proceeds as recovery for damages
related to hurricanes occurring in 2005. (c) The earnings per share
for Continuing Operations, Discontinued Operations and Net Income
are separately calculated in accordance with SFAS No. 128;
therefore, the sum of earnings per share for Continuing Operations
and Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. BIG LOTS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands) 13 WEEKS ENDED 13 WEEKS ENDED ----------------
---------------- January 31, 2009 February 2, 2008 ----------------
---------------- (Unaudited) (Unaudited) Net cash provided by
operating activities $216,584 $262,892 Net cash used in investing
activities (13,091) (20,646) Net cash used in financing activities
(207,956) (246,891) -------- -------- Decrease in cash and cash
equivalents (4,463) (4,645) Cash and cash equivalents: Beginning of
period 39,236 41,776 ------ ------ End of period $34,773 $37,131
------- ------- BIG LOTS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) 52 WEEKS ENDED
52 WEEKS ENDED ---------------- ---------------- January 31, 2009
February 2, 2008 ---------------- ---------------- (Unaudited)
(Unaudited) Net cash provided by operating activities $211,063
$307,932 Net cash used in investing activities (88,192) (58,764)
Net cash used in financing activities (125,229) (493,694) --------
-------- Decrease in cash and cash equivalents (2,358) (244,526)
Cash and cash equivalents: Beginning of period 37,131 281,657
------ ------- End of period $34,773 $37,131 ------- -------
http://www.newscom.com/cgi-bin/prnh/20011026/BIGLOTSLOGO
http://photoarchive.ap.org/ DATASOURCE: Big Lots, Inc. CONTACT:
Timothy A. Johnson, Vice President, Strategic Planning and Investor
Relations, +1-614-278-6622 Web Site: http://www.biglots.com/
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